A Second Wave of Cannabis Dispensaries

Based solely on applications, it’s possible San Francisco’s number of cannabis dispensaries could double. (Courtesy Image)

If you think San Francisco has a lot of cannabis dispensaries now, brace yourself for that number to possibly double. The San Francisco Office of Cannabis is currently vetting 47 new applications for marijuana dispensaries and delivery services desperate to operate, in addition to the 46 currently conducting business within the city.

Curious, SF Weekly reviewed all 47 applicants seeking new cannabis retail permits. Some applications hint at additional locations for existing dispensaries, like a new Barbary Coast North Beach location, to complement the one in SoMa.

Others are existing delivery services that hope to open brick-and-mortar shops, like Kind Courier’s proposed new location near 14th and Folsom streets.

Several are from familiar businesses not currently associated with the cannabis industry, but which want in on that game. Popular Castro cafe Flore hopes to open a Flore Store dispensary across the street, while Bayview burger-and-croughnut joint CDXX has applied for a dispensary permit not far from its previous Third Street location.

Still more of these applicants are local newbies with quirky stoner names like Displeased Marmot. Others are out-of-town industry giants like the L.A.-based MedMen, who hope to make a splash in promising San Francisco.

And most interestingly, one of the applicant locations is a strip club. The application for a company called Crazed Caribou hopes to do business at 312 Columbus Ave., the current location of Little Darlings gentlemen’s club. And before you ask, no, a business cannot be both a strip club and a cannabis dispensary. It’s one or the other.

Choosing which of the above can open up shop are just some of the many decisions tasked to the San Francisco Office of Cannabis. And in typical San Francisco form, the red tape is layers thick.

“Right now, we are in the process of reviewing applicants for eligibility to even go through the permitting process with the city,” San Francisco Office of Cannabis Director Nicole Elliott tells SF Weekly. “We’re in part one of what will be a very robust City approvals process.”

We know that not all 47 applicants are going to get their permits. Some applicants are within 600 feet of one another, something city law forbids.

Most notably, three different dispensaries are vying to open on the 1600 block of Haight Street. As they say in the movie Highlander, “There can be only one.”

“It creates a very competitive nature to the overall application process,” Elliott admits.

Her office’s solution, for now, is to hold two and process only one application within the 600 feet knowing that two of the applications will inevitably be denied. “It’s the best of a lot of bad options,” she says.

Similar conflicts will play out on blocks in Nob Hill and near Union Square, locations that each have two competing applicants.

Interestingly, no one has applied for cannabis permits for the Excelsior District or in Chinatown, two neighborhoods that have voiced significant opposition to new dispensaries. But the proposed permit at Little Darlings gentlemen’s club is pretty close to Chinatown, and a company called Wharf Kush has applied for a cannabis retail permit in the currently dispensary-less Fisherman’s Wharf.

All told, the 47 applications speak to impending change in the city’s cannabis retail scene. Not a single new dispensary has opened in San Francisco since the recreational marijuana laws kicked in last January, in part because the Board of Supervisors insisted that only “equity applicants” who’ve been affected by the War on Drugs should be considered in the coming round of approved dispensaries and delivery services.

“It’s a perfect example of how San Francisco is working really hard to try and right some of the wrongs that even we as a city participated in when it comes to overpolicing,” Elliott says.

And while the Office of Cannabis is screening applicants’ criminal conviction histories, a prior nonviolent marijuana arrest doesn’t really hurt a candidate in this process.

“Prop. 64 makes that very clear,” she insists. “There are things a person can have as part of their conviction history that should not disqualify them from being able to pursue these permits.”

Business owners can qualify as equity applicants by having prior convictions for cannabis offenses, or by having a member of one’s immediate family with such a prior conviction. Other criteria include being in a population affected by the War on Drugs, having attended an SFUSD school for five years, or having lost San Francisco housing after 1995.

So how can a national chain like MedMen, who’ve been described as “The Starbucks of Weed” and “America’s first $1 billion marijuana unicorn,” possibly meet San Francisco’s social justice equity criteria?

“Applicants can be incubators, who don’t necessarily meet the equity conditions, but do agree to support a verified equity applicant in seeking a permit,” Elliott explains.

She says very well-funded companies can provide space to equity applicants and support their security requirements, or provide the financial equivalent through technical assistance for no less than three years to gain equity incubator consideration.

“If we’re going to see a surge on investment in San Francisco, we want to make sure we leverage that investment to the benefit of our equity goals,” she tells us.

Nevertheless, we should not expect to see any of these new dispensaries or delivery services opening anytime soon. One applicant told SF Weekly that their best-case scenario was to open by the end of the year, since the Office of Cannabis permits are just a first step in a regulatory marathon that also requires Planning Commission approval, and fire, building code, and Department of Public Health inspections.

But the fact is that the number of marijuana dispensaries and delivery services that have applied for permits could double the number of retail cannabis businesses here. And if that happens, the San Francisco cannabis scene would be twice as potent.